Money does not grow on trees…
But Step just closed a $22.5M Series A to help disrupt banking for the next generation!
Less than four months ago we launched Step, a next generation banking solution for teens and families. Today we are excited and humbled to announce that we have closed our Series A, and raised $22.5M to support our vision. I remember growing up and my Dad telling me on multiple occasions, “money does not grow on trees son.” I also remember him telling me “you have to work for it” and that is something that has always resonated with me.
Well, we have been heads down the past year working hard to build Step. The response from consumers after our launch has been both exciting and overwhelming. In full transparency, we were not set up for or expecting the response that we received. Out of the gate we started signing up thousands of customers daily and in the first three months our waitlist grew to more than 500,000 people. The good news, it is clear that there is market demand and we are growing rapidly to meet it.
David Sacks, a close friend and someone that I highly respect in the venture community, talks a lot about virality and explosive growth. In his medium post here, he says “Virality is the phenomenon of users recruiting new users. When this occurs in a viral loop with a sufficiently high viral coefficient, the results can be explosive.”
When we announced Step in February we released a referral app that enabled consumers to sign up for our waitlist and refer friends. For each successful referral our customers would earn $1. While $1 does not seem like much of an incentive to most, our target demographic initially is teenagers. For a 16 year old, $1 goes a long way which was our thesis. From a consumer business point of view, I will take a $1-2 customer acquisition cost all day long :)
(Example of our referral app virality where one customer resulted in almost 100 others to sign up in less than 4 hours)
Our goal and mission has not changed; build a trusted banking platform that compliments today’s modern lifestyle and teaches not only teens, but also families how to better manage money. As we move into a cashless era where digital content and transactions fuel our daily lives, the need for innovation in financial services increases.
We are also excited today to announce partnerships with Mastercard, Evolve Bank & Trust and Stripe. The Step card is co-branded with Mastercard, a globally trusted and universally accepted payment network. Step’s bank accounts are securely held, and FDIC insured through Evolve Bank and Trust.
None of this would be possible without the amazing team and hard work behind Step. I am thankful for the commitment and passion each team member has for our company and words don’t describe the gratitude I have for you all. It is amazing what we have achieved so far, and the best part, we are just getting started. We are hiring and looking for great folks to join our awesome team so check out the list of roles that we are actively looking for here.
I would also like to thank our investors Stripe, Crosslink Capital, and Collaborative Fund for their support, especially Jordan Angelos, John Collison, Patrick Collison, Will Gaybrick, Taylor Greene, Joe Guzel and Eric Chin, who are partners on this journey. We are excited that Stripe led our Series A and look forward to continued success together.
We recently began beta testing to friends and family, with widespread commercial availability coming this Fall. In the meantime, parents and teens can still sign up for early access to the Step waitlist and begin earning money by inviting friends.
Our goal for this round is to invest in people, technology and product to bring our vision to life. I realize money does not grow on trees and fundraising is not an achievement. It is simply further validation and support in our journey and enables our team to focus on building the best banking experience possible. The stakes are higher and the pressure is on but we are ready for the challenge.
Follow me on Twitter: @cjmacdonald
Follow Step on Twitter: @stepmobile
Follow Step on Instagram: @stepmobile